The War on the Poor

A sign painted on top of a mural says 'We accept food stamps,' on August 19, 2013 in Harvey, Illinois.

This article appears in the Winter 2016 issue of The American Prospect magazine. Subscribe here.

$2.00 A Day: Living on Almost Nothing in AmericaBy Kathryn J. Edin and H. Luke ShaeferHoughton Mifflin Harcourt

We should know by now that Temporary Assistance for Needy Families, or TANF—the so-called “welfare reform” enacted in 1996—is a failure. For every 100 families in poverty in 1996, 68 received cash assistance. Now it’s only 23 in 100. Less than 1 percent of our population—just 3.1 million people—receives TANF now. Cash assistance has all but disappeared nearly everywhere. Because states have complete discretion over who will get help, two relatively generous states—California and New York—account for close to half of the nation’s welfare rolls. The other 1.7 million recipients are divided among the remaining 48 states and the District of Columbia. No wonder 7.5 million people have no income other than food stamps (now known by the acronym SNAP) at any given time. TANF is a success only by one indicator: It drastically cut government aid to the very poor.

Aid to Families with Dependent Children, the old welfare program that Congress “reformed” in 1996, was a direct federal entitlement program. The money flowed through to needy, eligible recipients. Conservative state governments could not obstruct it (although, as now, they could set benefit levels). TANF, by contrast, is a block grant with fairly broad authority, so states are free to divert income-support money to other uses loosely connected to children and families, like financing child-welfare protection agencies. In other words, they can use the TANF block grant for what amounts to general budget relief.

To make matters worse, federal funding for TANF has been stagnant since the law was enacted, and is now worth 30 percent less than it was in 1996. By design, TANF made it easy for states to intentionally push people away from the program. One permitted technique is the increased use of sanctions, which kick recipients off the rolls for minor infractions. Another is the use of time limits, which the states can set at levels even stricter than the federal five-year limit. States may simply narrow eligibility for assistance and therefore keep people from ever getting into the program. TANF gives the state every right to do this unless it is caught violating the equal protection provision of the 14th Amendment of the Constitution. If the workers at the TANF office didn’t just declare the would-be applicants ineligible for one reason or another, they could ask privacy-violating and obnoxious personal questions that discourage people from even trying to get help.

Other than low-income people themselves, few people in Washington or anyplace else know and understand the meaning of these facts. Too many continue to proclaim that TANF is a roaring success because it has cut cost and presumably forced people into the low-wage labor market (where there are not enough jobs). In reality, we have ripped a huge hole in our national safety net.

KATHRYN EDIN AND H. LUKE SHAEFER have written a powerful book that breaks the silence. It is as worthy a successor to Michael Harrington’s The Other America as any I know. Edin and Shaefer do two things seldom joined together in a single book: Edin brings to the project her skills as one of our great ethnographic scholars, and Shaefer brings his exceptional understanding of the numbers about poverty and deep poverty in a number of data sets.

The statistics, as striking as are the ones I mention above, don’t do the job by themselves. Edin and Shaefer use human stories to produce a whole that is far more powerful than its parts taken separately. Shaefer adduces the shocking fact that 1.5 million households with 3 million children have cash incomes of less than two dollars a day—the number we usually use to measure third- and fourth-world poverty. Edin (with Shaefer) presents a deeply moving human face that brings the stunning numbers to life. It is an explosive book.

Their choice of focusing on cash income is an eye-opener. Most of the people in the book receive food stamps, which typically provide an income equivalent at about a third of the poverty line (a little over $6,000 annually for a family of three). But food stamps aren’t cash. As Edin and Shaefer point out, cash is crucial. It is needed to pay rent, or if people are couch-surfing or crammed into an overcrowded and usually dilapidated lodging, they still need to have money to get diapers, tampons, and a host of other things the rest of us take for granted. As the authors point out, their only recourse is to sell their precious food stamps at a deep discount. Indeed, the fact that desperately poor people are willing to lose about 40 percent of the value of their food stamps (the going rate) in order to trade some of them for cash suggests just how desperate the need for cash is.

THE AUTHORS GET TO KNOW PEOPLE struggling in Chicago; Cleveland; Johnson City, Tennessee; and the Mississippi Delta, and we do, too. We see that these are people with long histories of work who still (except for a disability caused by a work accident in one of the stories) want first and foremost to find work and to support their families. We see firsthand the dysfunctional operation of today’s labor market in which low-wage work is epidemic and a total lack of jobs is often the prevailing fact. We see the inner city and the rural world. Nothing is working as it should. And we see that cash assistance to ameliorate the pain is simply unavailable.

The stories will make you angry and break your heart. Modonna Harris in Chicago (all names are fictional) went to a good high school and had some college, but made a bad choice in marriage and ended up working, for eight years, as a cashier at Stars Music, where she was able to support herself and her daughter, Brianna. Everything began to unravel when she was fired one day because her cash drawer was short $10. Her housing fell apart and she and her daughter bounced from one family member to another, sometimes confronting situations of considerable peril to her daughter. She applied unsuccessfully for job after job and finally tried to apply for TANF, encountering the runaround clearly meant to drive people away. It succeeded.

Jennifer Hernandez and her two children, also in Chicago, were homeless and in a shelter, her second stint in two-dollars-a-day poverty. After applying for numerous jobs, she obtained one cleaning offices. It went well at first, but deteriorated into longer and longer hours, cleaning abandoned houses amid mold and mildew. She soldiered on, but her asthma finally won out and she was back in two-dollars-a-day poverty. Rae McCormick, in Cleveland, had grown up living in more places than her 24 years. She finally found apparent stability for herself and her daughter, living with family friends, and got a job as a cashier at Walmart. She was honored as the fastest cashier in the store, but one night, her host left the truck she used to get to work without gas. When she called in to report her problem, they told her not to come back the next day. Other work turned out to be unavailable. Jessica Compton in Johnson City, Tennessee, sells her blood plasma as often as she can because neither she nor her husband can find work. Paul Heckewelder in Cleveland had a successful string of pizza shops that fell apart in the recession. Twenty family members live in his house. All who can seek work do so, and in the meantime forage in Dumpsters and sell their plasma.

Even so, too many politicians continue to say that the problem is laziness, and demonize the poor for wanting “free stuff.” Not satisfied with destroying cash assistance, they call for turning food stamps into a block grant as well, and invite the states to finish shredding the safety net altogether. And don’t think that can’t happen. See TANF.

Here is where we are now. Counting public benefits not included in the traditional poverty measure, about 15 million people are in deep poverty, with annual incomes below half the poverty line—about $10,000 for a family of three. What is even more shocking is the at least 4.5 million people with incomes far below that—an appalling two dollars a day.

AID TO FAMILIES WITH DEPENDENT CHILDREN, or AFDC—welfare as we used to know it—was in fact deeply flawed, and needed to be overhauled. It did not help people get jobs and therefore allowed people to stay on the rolls for unacceptably lengthy periods. AFDC also allowed the states to pay benefits at any level they chose (as TANF still does). But it had one positive characteristic that was very important. There was a legal right to receive it. Indeed, the nub of the critique from the right and some others was just that. Many states were always very stingy, but people who qualified under the law could go to the welfare office and ask for help, and it was illegal to turn them away. That’s why for every 100 families in poverty, 68 were getting help. Even in Mississippi, which offered AFDC at the level of 11 percent of the poverty line, a qualifying family also receiving food stamps would get total benefits at 40 percent of the poverty line. Now, only 10 percent of poor families in Mississippi receive TANF. No wonder so many live in deep poverty, even with incomes as low as two dollars a day.

The importance of having a legal right to public assistance became visible in a dramatic way during the recent recession. SNAP, to which people still have a right, soared from 26.3 million food-stamp recipients before the recession to 46 million at the depth of the recession (and is still near that figure). TANF went from 3.9 million to 4.4 million recipients. The difference, of course, was that there is no right to receive TANF. The states were free to turn away anyone they wanted to. And most of them did. SNAP served as a strong counter-recession force; TANF did not.

Things looked better for the first few years after the 1996 law was enacted (if you didn’t look too closely), so there was a story line of success for TANF adherents until about 2000. The number of single mothers without a high school diploma who found jobs did go up significantly. The secret ingredient was near-full employment. However, the last half of the 1990s was the first and only period of significant growth in jobs and wages between the early 1970s and now. The welfare-reform proponents took the credit. (Never mind that 40 percent of the people who left welfare in that period did not find jobs.) In a time of prosperity, TANF’s shortcomings were less visible. Indeed, TANF could only seem successful during a period of full employment, which serendipitously occurred just after the law was enacted and consequently averted the immediate disaster, which has now played out since 2000 and especially during the Great Recession. In the vast majority of states, the only “success” of TANF has been saving money that very low-income people desperately needed.

But the success story, such as it was, ended after 2000. The number of single mothers without a high school diploma who had jobs went steadily down and is now almost to the level it was before the 1996 law was passed. The rolls have gone down and down—down another 600,000 people in just the last two years—a fiscal triumph at horrific human cost.

Except in a very few states, welfare is indeed dead. And Kathryn Edin and H. Luke Shaefer have done more than anyone I know to show us the damage that has been done.

About the Author

Peter Edelman is a professor at Georgetown University Law Center. Edelman resigned his post as Assistant Secretary of Health and Human Services in protest of President Clinton's support of the Republican welfare reform proposal.